Core Insights - Netflix faced an unexpected $619 million tax expense from Brazil, significantly impacting its operating margin for the September quarter, leading to a stock decline of over 6% [1] Financial Performance - The operating margin reported for Q3 was 28%, which would have exceeded the company's guidance of 31.5% without the Brazilian tax issue [2] - The tax expense was attributed to a national tax on outbound payments known as the Contribution for Intervention in the Economic Domain (CIDE) [2][3] Tax Implications - The tax involves a 10% levy on certain payments made by Brazilian entities to companies outside Brazil, affecting not only Netflix but potentially other companies as well [3] - Netflix Brazil pays Netflix U.S. for services that enable subscription offerings in Brazil, and a favorable ruling from a lower court in 2022 had previously led the company to believe it was not subject to this tax [4] Legal Context - A recent ruling by the Brazil Supreme Court indicated that the tax applies to a broader range of transactions than previously thought, prompting Netflix to reevaluate its legal standing and record the tax expense in Q3 [5] - Approximately 20% of the recorded tax expense is related to 2025 [5]

Group 1 - Paramount Skydance's acquisition offer for Warner Bros. Discovery (WBD) has been rejected for the second time, with the latest bid at $24 per share, up from an initial offer of $20 [1] - WBD has confirmed it is for sale and has initiated a strategic review process due to unsolicited interest from multiple parties [3] - The market has reacted positively, with WBD's stock price doubling since the beginning of the M&A discussions, reaching a three-year high with an 11% increase [5] Group 2 - Media earnings season is underway, with both WBD and Paramount expected to report quarterly results soon, which may provide insights into the M&A landscape [2] - Speculation exists regarding interest from other companies like Comcast, Netflix, and Amazon, but Paramount is seen as a strong contender due to its financial backing and relationships [4] - Netflix's co-CEO has expressed skepticism about a bid for WBD, while Comcast may face antitrust challenges [4]

Netflix co-CEO Greg Peters took another dig at big media M&A today as Warner Bros. Discovery formally put itself in play, calling studio mergers no sort of solution to the industry’s challenges. “You have to do that by the hard work of developing those capabilities in the trenches day to day. You don’t get there simply by buying another company that is also still developing those same capabilities,” he said on the giant streamers quarterly earnings webcast. “Think about Disney Fox, and Amazon picking up MG ...

Core Insights - Netflix's third-quarter earnings fell short of Wall Street expectations, with earnings per share at $5.87 compared to the consensus of $6.97, primarily due to a dispute with Brazilian tax authorities affecting operating margins [1][2] - The company reported revenue of $11.51 billion for the June-to-September period, aligning with targets, but operating margin was 28%, below the guidance of 31.5% [1][2][4] Financial Performance - Revenue growth was 17% year-over-year, driven by higher ad revenue, price increases, and subscriber growth [4] - The company achieved its best ad revenue quarter in history and is on track to double ad revenue for the full year compared to 2024 [4] Viewership and Content Strategy - The Season 2 premiere of a key series in September generated over 7 billion viewing minutes, significantly boosting viewership [3] - The Addams Family spinoff played a crucial role in Netflix's advertising strategy [4] AI and Future Outlook - The company expressed an optimistic outlook on the impact of AI, stating it is well-positioned to leverage advances in AI for production and user experience [5][6] - Netflix highlighted the empowering nature of Generative AI for creators, showcasing its application in recent productions [6]

Shares in Warner Bros. Discovery soared to their highest level since 2022 after the company affirmed interest from “multiple parties” in potentially acquiring all or part of its empire. Paramount has already been in pursuit of WBD, and news of its bid several weeks ago boosted the long-moribund stock. On Tuesday, it closed at $20.33, up 11%. While shareholders are cheering the idea that a bidding war could help finally get them above water after a three-and-a-half-year merger misadventure, Wall Street anal ...

Netflix has sealed a deal with Mattel and Hasbro to be global co-master toy licensees for KPop Demon Hunters as the franchise continues its march across media and consumer categories. The animated feature, whose soundtrack helped propel it to the top of the Netflix charts and make it a draw in movie theaters, will propel toy lines arriving in 2026, but with pre-orders starting next month in time for the holiday season. Since its June streaming debut, the film has racked up 325 million global views, with th ...

With Warner Bros. Discovery n play now and set to split in half next spring, the company said today it’s received unsolicited interest from multiple parties for all or part of its businesses and is initiating a review of strategic alternatives. The statement today comes after an initial offer by David Ellison’s Paramount Skydance for the whole company ahead of April when it plans to separate its streaming and studios operations from its global cable. The company’s full statement: While Warner Bros. Discov ...

Last month’s suspension of Jimmy Kimmel Live! coincided with a doubling of subscriber churn rates on Disney+ and Hulu, according to the latest streaming report from Antenna. Churn, the industry term for the number of subscribers canceling their service in a given period, hit 8% on Disney+ and 10% on Hulu. Their levels in August were 4% and 5%, respectively. During the days-long Kimmel affair, a flurry of posts on social media, including from A-listers like Howard Stern, indicated that some Disney+ subscri ...

Core Insights - Paramount is expected to accelerate its layoffs to the week of October 27, ahead of its Q3 earnings call scheduled for November 10 [1] - The initial round of layoffs is projected to affect 2,500-3,000 positions, with around 2,000 of those being stateside employees [2] - The company aims to achieve approximately $2 billion in cost savings following its merger with Skydance, which was finalized on August 7 [3] Layoff Details - The layoffs are anticipated to continue until the end of the year, with the first round starting in late October [2] - Cuts will be made across various divisions including theatrical, streaming, and linear, with key executives already having left the company [3] - Paramount currently employs around 18,000 individuals globally, while Skydance has a workforce of under 2,000 [3] Management Statements - Paramount President Jeff Shell expressed a desire to avoid quarterly layoffs, acknowledging the difficulty of the situation [4] - David Ellison informed staff that a return to the office five days a week will be expected starting January 5, 2026, with buyout options available for those preferring not to return [4] Strategic Moves - The new leadership under Ellison is preparing a potential $60 billion bid to acquire Warner Bros Discovery [5]

Core Viewpoint - Warner Bros. Discovery (WBD) has rejected a boycott of the Israeli film industry, emphasizing its commitment to an inclusive environment and adherence to its non-discrimination policies [1][2][3] Group 1: Company Policies and Statements - WBD's spokesperson stated that the company prohibits discrimination based on race, religion, national origin, or ancestry, and believes that a boycott of Israeli film institutions violates these policies [2] - The company respects individuals' rights to express their views but will align its business practices with its policies and the law [2] Group 2: Context and Reactions - WBD's statement follows a letter signed by several prominent figures advocating for a boycott of Israeli film institutions, which they claim are implicated in genocide and apartheid against Palestinians [3] - The timing of WBD's response coincides with significant geopolitical events, including the release of Israeli hostages and a peace plan signing ceremony in Egypt [2][3] Group 3: Competitive Landscape - Paramount, which recently rejected a similar boycott, is also in the process of attempting to acquire WBD, with a potential offer in the $60 billion range [4]